What is life insurance?

Essentially, it’s a legal agreement between the insured and the insurance company that specifies payment of a predetermined benefit amount upon death, subject to the terms of the insurance contract.

Do you need life insurance? Would you want to protect survivors or dependents from financial hardship if you die. For example, if your family were to have trouble getting by without your salary, a life insurance policy can provide funds they need to continue living their lives.

 

What are some benefits of life insurance ?

Final Expenses  A death benefit can be used to help pay medical bills, funeral costs and other related expenses.

Mortgage Protection  Your loved ones can use the death benefit to help cover mortgage payments should they lose your income.

Income Replacement Your family can use life insurance proceeds to help maintain their standard of living.

Charitable Giving Expanding your legacy by giving to your favourite charity may also provide you with a valuable tax benefit

 

You may be hesitating to buy life insurance because you are not sure what type of life insurance meets your needs and budget.  After completing a brief financial needs analysis most people find that they require much more life insurance than they initially thought.  Usually it comes down to how much one can reasonably commit to paying for monthly premiums.

An individual must qualify for standard underwritten life insurance.  An electronic or paper application must be completed.  As part of the application progress, an attending physician’s report may be requested –  depending on the age of the applicant, amount of coverage applied for and medical condition.  Often an appointment is required for a nurse to visit the applicant to take urine/blood samples, height/ weight measurements and complete medical questions similar to those found on the insurance application.  There are no costs charged to the applicant for these services.

Once the underwriter (insurance company) has obtained the completed application, all medical tests results/reports, a decision is made.  In most cases your advisor would have anticipated if your application would be approved with standard rates or if you may receive an offer for coverage with a higher premium.

There is the option to purchase non-medical insurance policies.  This has been a good option for many that want the convenience of only completing an application and don’t mind paying a higher premium.  It has also proved to be a solution for those with pre-existing conditions that make it difficult to qualify for a medically underwritten policy.  Your advisor could provide the quotes for different scenarios to see whether it is worthwhile to apply for a medically underwritten policy and use the non-medical option as an alternate solution if needed.

So as you can see the advisor has to do quite a bit of work and has not earned any commission as yet.  They still have to provide you with more information before you can make a decision to purchase and earn your business.  Term insurance or permanent insurance – what is the difference?  Limited Pay, whole life, universal life, term to 100…you get the idea.  Our advisors will be happy to help you determine which options are available to meet your needs and budget.